ETF Talk

How to Invest with the World Cup Host

Brazil is one of the fabled BRIC (Brazil, India, Russia and China) emerging-market juggernauts, but in recent years the country has lost a great deal of its investment star power. The Brazilian government mismanaged spending on stadiums and other athletic facilities in its role as the host of this year’s World Cup and the 2016 Summer Olympics. The mismanagement is just the latest indicator of how the Brazilian economy has been misdirected under President Dilma Rousseff.

Yet recent polls suggest that Brazilians soon may elect a new leader. And two major global sporting events in three years will serve to raise Brazil’s profile on the world stage. Thus, there is potential for Brazil to make a turnaround from its current 2% growth rate back to the 4% growth it hit in the late 1990s. One way to buy into that turnaround is via the iShares MSCI Brazil Capped (EWZ).

EWZ seeks to track the investment results of an index of equities on the Brazilian stock exchange. The free float-adjusted market capitalization-weighted index uses a capping methodology to insure investment diversity. So far this year, EWZ has seen a gain of 9.51%, after dips in February, April and May. It offers a yield of 3.11%. Many expect stronger growth in October, due to an incoming reformist administration.

Read more about how you can invest with Brazil, host of the 2014 World Cup and 2016 Summer Olympics at Eagle Daily Investor.

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